Sony's Strategic Shift: A Case Study in Change Management and Revival

This case study examines Sony Corporation's organizational change initiatives in response to a financial crisis experienced between 2010 and 2012. The analysis explores the company's struggles with technological advancements in key sectors like gaming, television, and mobile products. It highlights the internal communication issues and siloed mentality that hindered innovation and market competitiveness. The case study further discusses the implementation of Kazuo Hirai's 8-step model of change management, including strategic shifts towards entertainment, digitalization, and gaming, as well as controversial decisions like job cuts. While Sony achieved some success with products like Blue Ray Disk and PS3, critics questioned the depth of the restructuring efforts, particularly in areas like software development and after-sales service. Ultimately, the case study concludes that Sony's organizational change was necessary to address its financial difficulties and regain its competitive edge, emphasizing the importance of leadership and strategic management during times of crisis.

Running head: CHANGE MANAGEMENT
Change Management
Name of the Student
Name of the University
Author Note

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Introduction:
The organization in the competitive world of the business market often fails to run
their business with the desired level of acceleration and in those cases the organizational
change needs to be implemented in order to make sure that the organization gets back on
track (Cameron & Green 2015). The need for the change for any organization lies in the
background of the formation of the change. The paper analyses the background of the
organizational change of a chosen organization Sony Corporation.
Company Overview:
Sony as a firm has been operating since 1946 for about a period of around 72 years. It
operates in the hardware industry and manufactures electrical products primarily. Over the
last few years, the firm has altered the prices in relation to the fluctuating economic market
conditions.
The products of Sony are diverse and includes a wide range of goods namely –
computer accessories, digital cameras, home theatre systems, home audio and video
instruments, storage and recording gadgets, games and even portable audio and video systems
(Sony.co.in, 2018).
Although Sony has been efficient enough in creating better technology improvisation,
the firm’s major competency has been in the field of obtaining higher degrees of product
differentiation over the years of operation. In fact, the company has continuously been able to
reduce the size of its goods thus increasing the efficiency and ease of carrying these gadgets
as compared to gadgets from other firms.
The business strategies being used and currently implied by Sony include
international expansion of the business at hand. The company is also increasingly trying to
improvise the designs of its products. The other most important strategy of the firm include

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investment in the sections of gaming. In addition to these, the company has also started
increasing their attention and focus on the corporate social responsibilities.
Background of the Change:
The organization was a major market dominant force in the electronics field and with
the presence of the quality of their product, they had the potential to reach significant heights.
The organization generally faltered in acknowledging the importance of the technological
advancement in gaming, television industry and in the mobile products. Sony, being a leading
organisation, in the electronics market was expected to be one of the early risers but it was
proved wrong when they were unable to introduce iPod even when they got the concept
before Apple just because of their incapability of finding the small inexpensive hard drive.
This was a significant proof of the fact that the organization was not doing justice to their
spirit of innovation. This was evident with no increment in the allotted budget of the
organization in the research and development sector in the financial year 2010 to 2012
(Sony.net, 2018). The organization completely lost the innovative edge of it and became a
mere follower of its competitors. The organization was observed to have no effective
communication between the parts of the organization like Sony Network Entertainment, Sony
Computer Entertainment, VAIO and the mobile business group, Sony Mobile
Communications, Digital Imaging Business group, Professional Solutions group along with
Home Entertainment and Sound Business group (Naganathan 2013). The silo-mentality of the
different parts of the organization was also responsible for the downfall of the organization.
The organization was significantly falling behind the market competitors in the television
market, smartphone market due to the limited focus on the part of the gaming and
digitalisation from the part of the organization. The CEO of the organization Kazuo Hirai had
to make some painful decisions of probable job cuts of 10000 over the three-year span

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starting from 2012 to 2015 in order to meet the massive financial loss of almost 4 billion
pound that it faced due to the above mentioned issues (Sony.net, 2018).
Analysis of the Change:
The CEO of Sony used the 8 step model of change management and was partially
successful with the change as the organization was significantly focusing on the three core
sectors which are Entertainment, Digitalization and Gaming which was visible with their
success with the Blue Ray Disk and PS3. The launch of PS3 and PS network were considered
as rectification where the organization was able to combine the cutting edge technology along
with the entertainment content. On the other hand, the development of the change vision by
the CEO was significantly criticised as that included 10000 job cuts.
Reason behind the Restructuring:
The organization was significantly criticised because of the lack of intent in
developing the software which the CEO rectified in order to support the hardware electronic
device. According to Norman and Verganti (2014), the CEO tried to revive the culture of the
after sales service in order to increase the goodwill of the organization but according to many
critics that was not sufficient to restructure the TV business.
Conclusion:
In conclusion, it can be asserted that the company underwent a financial crisis in the
years 2010-2012 and it was not able to deal with this easily because of the lack of innovative
approaches. This adverse situation facing the organization was seeking a major shift in the
organizational structure in order to control every aspect of the organization in the normal but
enhanced form. The need for the organizational change was considerably felt by the CEO and
even his acknowledged it with the proper leadership for the management of the change.

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References:
Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to
the models, tools and techniques of organizational change. Kogan Page Publishers.
Naganathan, V., 2013. A Comparative Analysis on Sony’s Approach to Problem Solving and
Decision-Making. International journal of management and business research, 3(1),
pp.69-88.
Norman, D.A. and Verganti, R., 2014. Incremental and radical innovation: Design research
vs. technology and meaning change. Design issues, 30(1), pp.78-96.
Sony.net. (2018). Sony Global - Annual Report. [online] Available at:
https://www.sony.net/SonyInfo/IR/library/ar/Archive.html
Sony.net. (2018). Sony Global - Sony Global Headquarters. [online] Available at:
https://www.sony.net/
Sony.co.in. (2018). Sony India | Latest Technology & News | Electronics | Entertainment |
Sony IN. [online] Available at: https://www.sony.co.in/ [Accessed 3 Sep. 2018].